USPTO – Still Got a Long Way to Go

The U.S. Patent & Trademark Office continues to struggle with a backlog of patents, a growing pendency rate and funding and staffing woes – all of which are hurting independent inventors in particular.

Independent inventors who have to wait longer for patents to issue are more vulnerable to knockoffs – their patent applications get published in 18 months, even if it can take four years or longer to have a patent issued. Meanwhile, without an issued patent, investors are less likely to fund startup innovation.

That’s the bottom line from John Schmid, a (Milwaukee – Wisconsin) Journal Sentinel reporter who pretty much stands alone among his mainstream media peers when it comes to keeping tabs on the USPTO.

To be sure, the USPTO has been making some strides under Director David Kappos. He’s instituted policies to fast-track some patent applications from independent inventors, as well as inventors developing eco-friendly technologies.

Kappos recently opened the first satellite USPTO office (in Detroit). He’s been able to claw back some of the funding that the federal government had long raided – the USPTO is designed to be self-funded through fees, but the Treasury had been making a cash-grab, which prevented the USPTO from hiring more examiners and making computer upgrades to keep up with a deluge of patent applications.

And Kappos has succeeded in inking deals with foreign patent offices to share work to trim duplication, particularly when it comes to determining prior art.

But the USPTO still faces huge challenges. In the context of President Obama’s State of the Union address last week, which celebrated inventors and noted that now is this generation’s “Sputnik moment” to innovate, a major obstacle to this important national agenda is the raft of problems facing the USPTO. (Note: Inventors Digest signed Obama to a yearlong subscription to the magazine – he seems to be a fan.)

Here’s what Schmid’s article listed:

• The agency took 3.82 years on average for each patent it issued last year, up from 3.66 years in 2009 and 3.47 in 2008, according to an analysis of Patent Office data. That’s well over twice the agency’s traditional benchmark of 18 months to deal with a patent request. And many took years longer.

• The total number of applications awaiting a final decision, representing new technologies ranging from pharmaceuticals to engine designs, remains stuck at 1.22 million, nearly unchanged from levels of the past three years.

• The chronically understaffed agency imposed a hiring freeze in 2009 and lost examiners into most of last year, unable to replace them because of budget constraints. Since 2005, it has aimed to hire 1,000 to 1,300 new examiners each year just to chip away at the backlog, but only began to hire again starting in August.

• In 2010, the first full year under a new reform-minded administration, the Patent Office collected $53 million in fees that it was not allowed to keep, according to limits imposed by Congress. Neither has Congress approved the agency’s 2011 budget, nor has it approved an agency fee increase, meaning it continues to operate at 2010 budget levels with a deficit of over $1 million on each business day, agency officials said.

A Journal Sentinel investigation in 2009 illustrated how the agency’s dysfunction impedes U.S. competitiveness and stifles innovation. A study released last year by Britain’s patent authorities found that the U.S. wastes at least $6.4 billion each year in “forgone innovation” – legitimate technologies that cannot get licensed and start-ups that cannot get funding because of U.S. Patent Office problems.
Read Schmid’s recent article on the Journal Sentinel website.

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